Democrats Get to Scrutinize G.O.P. Asian Connection

By LESLIE WAYNE

Published: July 22, 1997

WASHINGTON, July 21—
In the first round of the Senate campaign finance hearings, Republicans presented evidence of what they said were Chinese Government links to Democratic fund-raising practices. This week, the Democrats get their chance to claim Republicans also took money from foreign sources, in their case, a Hong Kong businessman.

At the center of the Democratic accusations is Haley Barbour, the former chairman of the Republican National Committee and the party's chief fund-raiser from 1992 to 1996. While raising millions for his party, Mr. Barbour was also head of a now-defunct research organization, the National Policy Forum, that arranged for the businessman to help the Republicans in 1994 and 1996.

Mr. Barbour is a familiar face to every senator on the Governmental Affairs Committee and his fund-raising efforts helped elect many among the committee's Republican majority. For them, his scheduled appearance as a witness later this week is expected to be awkward.

''It's ironic in that the biggest public name to appear before the committee, which was originally created to investigate the Democrats, will be the former Republican chairman,'' said Jan Baran, a Washington lawyer who represents Republican politicians. ''Haley is widely appreciated among Republicans for his extraordinary efforts as chairman of the party. But the appearance of foreign money being injected into a political activity is not good.''

Now a corporate lobbyist, Mr. Barbour is credited with raising the money that led to the 1994 Republican takeover of Congress and that kept the Republicans in control of Congress in 1996. In addition, by Republican calculations, Mr. Barbour's fund-raising led to Republicans' winning 11 governorships and 500 state legislative seats during his tenure.

Still, for all his fund-raising prowess, Mr. Barbour has handed the Democrats the one case of Asian-linked campaign contributions involving the Republican Party: As head of the National Policy Forum, Mr. Barbour arranged for Ambrose Tung Young, Hong Kong businessman, to put up $2.1 million in collateral that allowed the Forum to get a commercial bank loan in 1994. The money from the loan was then given to the Republican Party for use in that year's election campaign.

What is more, as a result of that arrangement and because of later actions by Mr. Barbour, some $740,000 of Mr. Young's $2.1 million collateral ended up in the account of the Republican National Committee in 1996 and was funneled into last year's Congressional elections. Some went to the states of some of the Republican committee members.

For Senator John Glenn, the committee's ranking Democrat, who has been skeptical about Republican accusations of Chinese Government influence in the last election, this is the only evidence of foreign wrongdoing so far. In his opening statement, Mr. Glenn referred to Mr. Barbour and said, ''The head of a national political party knowingly and successfully solicited foreign money, infused it into the election process, and intentionally tried to cover it up.''

But Mr. Barbour's prominence and his ties to Republicans make investigating this episode difficult.

''This will be exceedingly awkward and is just a hint of the awkwardness that could develop later in the hearings,'' said Thomas Mann, a Congressional expert at the Brookings Institution. ''The reality underlying the hearings is that every member of that committee is up to his or her eyeballs in fund-raising. It will be fascinating to see whether Barbour adopts an aggressive stance and if the Republicans soft-pedal what he did.''

Last weekend, Mr. Barbour, along with representatives of the National Policy Forum and associates of the Mr. Young, were questioned by Senate investigators. Mr. Young, a citizen and resident of Hong Kong, was questioned by Democratic investigators recently in London and portions of his testimony are expected to be introduced into the record. The hearings resume on Wednesday.

Democratic investigators on the committee complain that they have been squeezed for time by the Republicans, who have been slow to give them information and schedule their depositions. Still, Mr. Barbour will be testifying voluntarily and Senator Fred Thompson, the Tennessee Republican who is the committee's chairman, recently ordered some reluctant Republican witnesses to comply with their subpoenas.

''Yes, Haley will be the first big person up before the committee,'' said Ed Gillespie, a spokesman for Mr. Barbour. ''But there will be no story because everything he did was legal. It will become clear this week that the Democratic rhetoric that 'everybody does it' in terms of accepting foreign money will not be supported by the facts. The National Policy Forum was a separate, nonprofit think tank. This is giving the Democrats an opportunity to beat up on a party chairman who beat them up pretty badly in the elections.''

Democrats on the committee will try to prove their main claim: That the National Policy Forum, while set up as a separate nonprofit organization, had a financial relationship with the Republican Party that allowed foreign money to be used to benefit Republican office-seekers.